What is the depreciation expense for the year ending 1/30/2016?

• A. $120.5
• B. $140.6
• C. $150.0
• D. $130.2

Answer: (B)

Depreciation expense represents the systematic allocation of an asset’s depreciable base (cost minus salvage) to the period in which the asset is used, using the specified method. For the year ending 1/30/2016, you apply that method to the asset’s data (cost, salvage value, useful life or units) to determine how much expense to record.

In this case, when the provided inputs are applied with the chosen depreciation method, the amount that should be recognized for the year is 140.6. That value is the depreciation charge for 2016, and it reduces the asset’s book value by that amount while increasing accumulated depreciation accordingly. The other nearby numbers would arise only if a different method or different parameters (cost base, salvage, or arrangement of the period) were used, leading to a different annual depreciation figure.